Interactive Brokers Group Inc (IBKR), an electronic trading major, has recently submitted a prospectus to the US Securities and Exchange Commission, or SEC. This prospectus is in order to announce the registration of up to 990,000 shares within its Class A common stock.
A Bold New Idea
Interactive Brokers states that it will be offering eligible persons the opportunity to receive rewards. Particularly, this will take shape in the offer to receive these shares through participating in one or more promotions that were designed to attract new customers to IBKR’s brokerage platform. The idea behind it is to enhance customer loyalty, all the while increasing the amount of assets held within its brokerage business.
As the company itself explained this, the promotion stands as a unique way for the brokerage business to grow, all the while enhancing the branding, customer engagement, as well as loyalty.
No Money To Be Gained, Just Exposure
The shares that these eligible persons are issued with through these promotions will primarily represent newly-issued shares of Interactive Brokers Group Inc Class A common stock. In limited circumstances, the company may even acquire these shares themselves by way of open market purchases, or through existing treasury shares, as subject by applicable law. It should be noted, however, that this offering is promotional in its nature, so Interactive Brokers won’t receive any form of cash proceed when they issue its new shares of Class A common stock.
As it stands now, the Promotions mentioned will primarily be connected through the “BET, LEARN, WIN” simulated betting product. Other forms of promotions will be focused around the customer referral program, but the broker highlighted that other forms of promotions are possible, as well. Participants that, for some reason, do not want to receive these shares they were awarded within the promotion have every right to waive the rights to this award. However, it should be noted that there is no promise made of an alternative award being provided, instead.
Terms And Conditions Apply
It should be noted, however, that these promotions have not been designed for short-term investment. Participants will not have complete control over the awards’ exact timing, and restrictions may be issued in regards to how they operate the shares.
It seems that IBKR is trying something entirely new. With any luck, this will serve to strengthen the company altogether, but runs the inherent risk of backfiring. It should be interesting to see how this pans out, and how it might affect other companies in the future.